(www.ming7.cn)
Updated: 2007-07-16 16:11

Stocks in the timber, paper and media industries performed better than the others. B shares were also weak. Of the 109 listed B shares, only 12 went up and five ended flat. Closed-end mutual funds listed on the exchanges dropped, with both the indices down over 2.5 percent.

Last week Bank of Nanjing and Bank of Ningbo, the first two small commercial banks to go public at home, opened for subscription for their initial public offerings (IPO). IPO price for Bank of Nanjing was 11 yuan per share while that for Bank of Ningbo was 9.2 yuan per share. Both chose the high end of their IPO price ranges.

The banks, with another two new shares - Sichuan Gaojin Food and Guangdong Ronsen Super Micro-Wire, together froze up 2.017 trillion yuan in IPO subscription last week, a record high for a single week.

The influx of speculative money from overseas, or hot money, into China's stock market is showing signs of slowdown thanks to recent cooling-down measures by the government, analysts said.

The increase in foreign exchange reserves not attributed to trade surplus or foreign direct investment declined from US$73 billion in the first quarter to US$48 billion in the second quarter, according to data from investment bank Lehman Brothers and CEIC, an international financial information provider.

The change "suggests that hot money inflows may be slowing," said Sun Mingchun, vice-president and Asia economist of Lehman Brothers Asia Ltd. He attributed it to strict checks by the government on illegal capital inflows and slow trading in the equity market since the rise in the stamp tax on stock transactions in early June. The hot money may now go to Hong Kong or other markets to seek better investment returns, Sun said.

However, the volatile movements by Chinese stocks also saw less investors coming to the playground. Last Thursday, the new A-share account opening dropped to 68,323, the smallest amount in five months since February 12. New accounts for B share and mutual fund investment also shrank, to 673 and 14,639 respectively. For July, daily opening of A-share accounts have been lower than 100,000, in contrast with the average 150,000 for June and 200,000 for May.

On the other hand, there was new advancement for the long-awaited index futures. Yinjian Futures Co Ltd and Shanghai Jiuheng Futures Brokerage Co Ltd became the first securities houses qualified for financial futures brokering business, according to the Securities Times.

As more than 100 futures firms have completed share transformation processes, the China Securities Regulatory Commission may grant qualifications to more of them, approximately in September and October, a leap toward the launch of China's first financial futures based on the CSI300 index, said analysts.

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